Fact Pattern 25-2 LNG Corporation and Mid-State Utility Company Enter a Contract for a Contract

question 54

Multiple Choice

Fact Pattern 25-2
LNG Corporation and Mid-state Utility Company enter a contract for a sale of liquefied natural gas. LNG draws a draft unconditionally ordering Mid-state Utility to pay $50,000 to LNG's order in sixty days. Mid-state Utility signs and dates the draft.
-Refer to Fact Pattern 25-2. On this instrument, Mid-state is

• A) ​the drawee.
• B) ​the drawer.
• C) ​the maker.
• D) ​the trader.

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Definitions:

Security Portfolio

A collection of investments held by an individual or an institution which may include stocks, bonds, mutual funds, or other investments.

Accounting Period

A time frame for which financial statements are prepared, typically a year, quarter, or month, to measure a company's financial performance.

Other Expenses

Costs that do not directly relate to the main business activities, such as administrative and organizational expenses.

Unrealized Loss Account

An account that reflects losses which have occurred on paper due to changes in market values but have not been actually realized through a transaction.